Studies of metabolic processes have been enhanced by our understanding of the relationships among obesity, body fat distribution, insulin sensitivity and islet beta-cell function. Thus, we have learned that although insulin resistance is usually associated with obesity, even lean subjects can be insulin resistant due to the accumulation of visceral fat. Insulin sensitivity and beta-cell function are also intimately linked. The hyperbolic relationship between these two parameters explains why insulin-resistant individuals have markedly enhanced insulin responses, whereas subjects who are insulin sensitive exhibit very low responses. Failure to take into account this relationship will lead to erroneous conclusions. By accounting for this important interaction, it has been clearly demonstrated that subjects at high risk of developing type 2 diabetes (older individuals, women with a history of gestational diabetes or polycystic ovary syndrome, subjects with impaired glucose tolerance and first-degree relatives of individuals with type 2 diabetes) have impaired beta-cell function. Furthermore, the progression from normal glucose tolerance to impaired glucose tolerance and type 2 diabetes is associated with declining insulin secretion.